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COMMENTARY for Tuesday
TODAY'S ACTION for Tuesday
Rick's Picks for Tuesday
We should give it a few more days for bulls and bears to digest Friday’s drama, but my expectation is that the next big thrust will be higher rather than lower. In the meantime, we can put in a stink bid at 1156.40, stop 1155.90, in case the March contract should swoon again. That’s the Hidden Pivot midpoint of the pattern shown in the chart, and it would be invalidated by a move overnight above 1185.00, point ‘C’. That’s quite possible, since a very minor rally pattern in play at around 11 p.m. EST projected to 1188.80. ______ UPDATE (3:36 p.m. EST): Another ugly day for the bullion bankers and commercials as Gold rallied a brisk $24 to peak at $1204. The pullback has been too shallow to give the scoundrels any comfort, so look for them to inadvertently befriend bulls once again on Wednesday as they scramble for cover.
A very minor rally pattern projected to 18.635 Monday night, but if the futures can eke out just a tad more altitude, surpassing a prior peak at 18.700 from last week, they’d be signaling the likely start of a new bullish phase. The midpoint resistance of the minor pattern lies at 18.545, and it has yet to be surpassed, but once above it the futures would become an odds-on bet to cover the remaining nine cents to the target. _______ UPDATE (3:25 p.m. EST): Silver exploded past the resistance pivots noted above, peaking at 19.300 before the tide receded to around 19.130.
The futures are understandably skittish about taking the celebration to a new level, but they seem equally unable to give up ground with so much bank-system liquidity aggressively seeking refuge. What’s a permabear to do? It is predictable than any shorts who have hung on for the last eight months will reap maybe three days of pleasure when the stock market finally falls apart. But no one can say exactly when that will happen, and we will need to occupy ourselves in any case as we wait for seasonal exuberance, such as it is, to run its course. For the moment, expect another head-butt near 1112, since yesterday’s selling did not even reach the 1076.00 midpoint support of the corrective pattern shown in the accompanying chart. _______ UPDATE (1:29 p.m. EST): With 30 minute remaining in the session, the futures were — big surprise here — head-butting 1112. The intraday high so far has been 1111.75, and it was followed by a pullback to 1107.50. The rally is most surely bullishly impulsive, having surpassed every peak but one (1113.00) going back two weeks. Expect DaSleazeballs to keep the pressure on shorts Tuesday night.
We hold eight Dec 12.5-15.0 call spreads for an average CREDIT of 0.15. Let’s try to arrange things so that we can come out with a covered write on 800 shares when the December series expires. It will require covering the short December 15 calls and shorting an equal number of January 17 calls at the same time. I’ll recommend doing so for a debit of 0.55, provided the stock is trading 16.20 or higher. This is a day order, but we’ll rethink it and try again later if it is too hard to fill. (Note: It will become harder the higher SLW goes, but you should work the order only if SLW is above 16.19.)
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Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to retest the midpoint support. As of now, that would signal not weakness, but a screaming opportunity to get long. Hard to believe, really, but that’s what the charts say.
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Stocks Whistle Past Graveyard
by Rick Ackerman on December 1, 2009 5:26 am GMT · 3 comments
U.S. stocks rose yesterday, so it would appear that Dubai’s reported troubles were overblown. Or were they? Initially, stock markets around the world sold off heavily on news that Dubai’s holding company, mega-developer Dubai World, was about to go under owing nearly $60 billion. When the story hit the news wires — unsurprisingly, on Thanksgiving Day — it sent Asian and European markets into a steep dive. U.S. stocks looked as though they would follow suit when index futures began to trade on virtual markets Thursday night. The electronic Dow contract, for one, was predicting that the » Read the full article